Ukrainian govt plans to toughen solvency requirements of financial sector members by 2016
The Ukrainian government plans to draw up and introduce tools of macro-prudential supervision (countercyclical capital buffers, the Loan-to-value ratio (LTV) and others) by 2016 and tune the system of the regulatory valuation of the quality of assets to define the necessity of restructuring the operation, capital adequacy, liquidity valuation and the conducting of regular stress tests.
The plans are stipulated in the comprehensive program on developing the financial sector for 2015-2020 which was approved by the National Reforms Council.
According to the document, the government plans to draw up and amend laws on defining systemic non-banking financial institutions by late 2015 and introduce special requirements to their capital, liquidity, and other indicators.
The government also plans to introduce the mechanism to purify the financial sector from bad assets by 2016, including through the revision of the requirements to assets which are used to cover the reserves of non-banking financial institutions, and by December 31, 2016 to introduce the bas asset securitization institution for financial institutions.
It is planned to continue introducing acts on examination of market players if they meet the core principles of effective banking supervision of the Basel Committee, the core principles of insurance of the International Association of Insurance Supervisors (IAIS) and other international practices by December 31, 2016.
By 2020, the government plans to toughen the solvency requirements of liquidity of financial sector participants via the introduction of the Basel III and Solvency II recommendations.
